Target: ₹2,845

CMP: ₹2,408

DOMS’ FY25 consol sales grew by 25 per cent with organic sales growth of 17 per cent (tad lower vs its guidance of 18-20 per cent). However, this was predominantly driven by capacity constraints (no major capacity addition happened in scholastic stationary/art material in FY25 & some delay in construction activities) and demand has not been a challenge.

With the addition of lines (for pens, pencil processing, paper stationery, etc.) in existing infrastructure and new greenfield capacities coming up from the end of FY26, the supply-side challenges should ease. Apart, DOMS has been widening its portfolio (launch of back-to-school range, DOMS tots range, adhesives, fine arts, paper stationery), which we believe should enable it to achieve organic revenue growth guidance of 18-20 per cent p.a. over the medium term.

Going ahead, the pace of commissioning of new capacities will be key for acceleration in writing instruments. Execution on Paper Stationery & Uniclan business (distribution expansion) over the medium term will be another key monitorable. We like the DOMS brand strength, R&D capabilities, fully backwards-integrated manufacturing setup and promoter’s ability to leverage these tools to create new growth engines and get product & pricing right. This, we believe, will enable it to continue outperforming industry growth. Sharp correction in the name should be used as an opportunity to add.

Published on June 19, 2025